When I was in business, I once owned of a small manufacturing company. Most of my time was spent in an office or on the road somewhere, but when I had time I loved to hang out in the factory, especially when delivery trucks dropped off merchandise. For me it meant that we were receiving materials, we could make something, and then we could bill someone. Of course, collecting from the bill was another story, but anyone who has ever owned a business and had to make a payroll knows how exciting it is to develop cash flow.
As much as I loved the opportunity, the truck’s delivery was always bittersweet though…
We could now build a product…
But we also had to pay for the materials…
Sometimes (okay…truthfully all the time) that would stretch our cash flow until we could ship a product, send a bill, and collect some cash.
That’s what I call the Delivery Truck Principle of Leadership.
It serves as a small example of a tension, which exists in all leadership decisions. The return on investment for any opportunity doesn’t come until after the investment has been made…sometimes a long time following the investment.
We see that in many areas of our life. Some examples from society that come to mind:
- New people come to a church and participate in programs, but they don’t immediately start contributing.
- New houses are built in a community but it takes years to recover money invested in the roads, schools and emergency services to add them.
- Hiring new employees may eliminate some stress but it may be months before they understand the culture and their role and are able to contribute.
- Gaining new clients for a business takes upfront marketing money, but becoming a loyal customer may take months or years, if ever.
- Developing a new program at your church may reach more people, but may pull resources from other programs.
You could add many more examples to this random list.
The principle I’m making is simple…
With every opportunity comes a cost.
The leader must discern when the cost exceeds the return, stretches the organization beyond its current capacity, or the opportunity’s costs simply aren’t received well within the organization. Many leaders only see the potential in the opportunity, but fail to consider the costs associated. When a wonderful-sounding idea is thrown out in a creative meeting, I can get excited with everyone, but I’m also reminded that someone will have to develop a plan and complete the work. There have been so many opportunities or ideas I have left behind because I didn’t sense our team was willing or able to assume the costs associated. (There is also a cost associated with not taking an opportunity, but I spend more of my time on this blog addressing those costs.)
Deciding to grow an organization is an admirable goal. I highly encourage it. Helping leaders grow and develop will continue to be a major focus of this blog. My point is simply to remind you of this: With every opportunity to grow, someone must be willing to count and eventually pay the costs associated with that growth. The wise leader considers those costs along with the excitement of the opportunity.
If you wish to continue this thought process answer this question:
Is your organization better at 1) Coming up with ideas 2) Counting the costs or 3) Completing a plan? While this may be the subject of another post, in my experience, organizations and/or individuals tend to excel in one of these three. Understanding the importance of each of them is a key to success.
Would anyone say their organization is excellent at all three?
You may wish to read THIS POST about 3 basic needs every organization must have for a similar thought process.